Energy Security and British Diplomacy
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Transcript of Energy Security and British Diplomacy
28 March 2011
Julian Mansfield, Policy Lead for Energy Security in
European and Multilateral Fora
Energy security and British
diplomacy
Content
• Energy security context
– What is energy security?
– What are the energy risks?
• British energy diplomacy
– International energy strategy:
• Price stability
• Investment in production
• Reliable supply
• Low carbon
• The importance of Norway
– Energy supplier
– Low carbon partner
Energy security
What is energy security?
Economic security
• Affordable
• Not volatile
Physical security
• Reliable
• Accessible
Energy Security
But there are risks to energy security
> Price rises and volatility
> Supply interruptions
Emerging economy demand
Developed economy demand
Investment challenges linked
to supply constraints
Geopolitical risks affecting supply
Demand-side risks:
Emerging / developed economy demand
0
1 000
2 000
3 000
4 000
5 000
1980 1990 2000 2010 2020 2030
Worl
d p
rim
ary
energ
y (
Mto
e)
Oil
CoalGas
Biomass
Nuclear
Other renewablesHydro
Global primary energy
demand grows by 36%
between 2008 & 2035,
with natural gas rising
the most
9
1115
9
12
411
7
820
36
3.5
1.5
8
Net Imports now & in 2030 (Million barrels per day)
Net Exports now & in 2030 (Million barrels per day) IEA WEO
As OECD & Asia import
more, MENA, Russia and
West Africa must supply
more
IEA WEO: New Policies Scenario
Supply-side risks:
production constraints
• Production capacity is limited:
– increasingly complex geology
and technology (e.g. Arctic)
– ultimately finite resources
– political conditions (e.g. MENA)
• Underinvestment after 2020
– Private capital
• Regulatory and tax uncertainties (e.g. Russia)
• Technology uncertainties
– Resource nationalism (e.g. Kazakhstan)
Supply-side risks:
geopolitical risks to export and production
Supply-side risks:
gas supply and security
But what are we doing
about it?
International Energy Strategy
• FCO/DECC/Cabinet Office jointly
developed an International Energy
Strategy to address these risks.
• It is based around 4 pillars:
British energy
diplomacy
Encouraging production investment
Enhancing supply
reliability
Enhancing price stability
Reducing demand
through low carbon
Enhancing price stability
Promote transparency in oil and gas markets (JODI)
Enhance producer-consumer dialogue (IEF)
Shared analysis (IEF, IEA, OPEC)
Emergency arrangements (IEA, OPEC)
Encouraging investment in production
Investment friendly regulation in key producer states
Demand transparency
Multilateral legal protection
Enhancing reliability of supply
More efficient EU and global gas
markets
Diversity and reliability of gas
supplies
Facilitating a North Sea offshore grid
Improving the physical security of key infrastructure
Limiting climate threats
Encouraging low carbon growth
Encourage low carbon technology Building confidence in
collective action
Gathering and sharing analysis
Shaping and framing the
global debate
Influencing key
constituencies
Our objectives
Eliminate fossil fuel subsidies
Promote energy efficiency
Global legal framework / EU 30%
Our diplomacy
The importance of Norway
NorwayandBritain’senergysecurity
• Norway supplies nearly 30% of UK energy,
including 58% of our gas imports and
74% of our oil imports.
• Gas has a vital role to play in the UK
energy mix during the transition to
low carbon and beyond.
• January’sJoint Prime
Ministerial Statement
of Cooperation reflects
the importance we place
on Norway
Norway: our key partner
• PMs joint Statement of Cooperation (January 2011):
– Energy supply: Safe oil and gas exploration, extraction and supply,
offshore wind, CCS, development of a North Sea power grid, and a
Norway-UK electricity interconnector.
– Low carbon: Promote climate policies and technologies and work towards
a successful COP17 in Durban
• Officials dialogue will take forward this political vision
• “One North Sea Joint Ministerial Statement”(August2010) agreed
on cooperation priorities on energy and climate change
Conclusion